Transactions with Related Parties

6 Months Ended

Jun. 30, 2021

5.	TRANSACTIONS WITH RELATED PARTIES (AMOUNTS IN THOUSANDS)

Inception Sciences Service Agreements

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Inception Sciences, Inc. (Inception Sciences US) and Inception Sciences Canada, Inc. (Inception Sciences Canada) are subsidiaries of Versant Ventures, affiliates of which, together, are a holder of more than 5% of our capital stock. The Company has service agreements with Inception Sciences US, and Inception Sciences Canada whereby research and support services are provided to the Company. On June 30, 2020, the Company terminated these Inception Sciences service agreements. Total expenses under the service agreements consist of charges for services, equipment usage, lab supplies and other out of pocket expenses as incurred.

For the six months ended June 30, 2021 and 2020, the Company incurred nil

and $1,315, respectively, in expenses under the Inception Sciences service agreements.

Related Party Notes Receivable

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On November 19, 2017, the Company loaned three employees a total of

$353

pursuant to promissory notes in order for such employees to early exercise certain stock options which had a total exercise cost of

$652.

Two employees paid

$298

which represents

50%

of the exercise cost and the other

50% totaling $298

was recorded as notes receivable. The other employee did not pay any portion of the exercise cost and

$55

was recorded as note receivable. The three notes receivable accrue interest at

2% per year and will mature on November 29, 2022.

The notes receivable vest over time until maturity in conjunction with the vesting of the early-exercised stock options.

In February 2020, one of the employees left the Company in May 2019 and repaid her note balance of

$44, of which $43

was the vested portion of the note receivable and

was accrued interest. On June 25, 2021, prior to the closing of the Merger Agreement, one of the employees’ note receivable plus accrued interest totaling

$278 was forgiven by the Company.

This amount was recognized as compensation included in general and administrative expense in the accompanying consolidated statements of operations for the three and six months period ended June 30, 2021. As of June 30, 2021 and December 31, 2020, the balance of the vested notes receivable and accrued interest was

$38 and $260, respectively.